The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1887-07-28
RAILROAD QUERIES.
The Investigators Still After
the Southern Pacific.
SCORING THE THURMAN ACT
A Reason Why the G. p. should Not
be Able to Liquidate Its Debt
to the Government.
The Railroad Investigation.

SAN FRANCISCO, July 26.-The chief
witness examined by the Pacific Rail
way Investigating Committee to-day was
A. A. Cohen, one of the attorneys for
the Southern Pacific. He had con-
Quoted various suits against the Central
Pacific prior to his entering the railway
company's employ, one of which was
by San Joaquin County against the
road on certain bonds, but which was
afterwards compromised. He also ap-
peared in the suit by Robinson and
other stockholders against the Central
Pacific, for an accounting of the funds
of the company. The suit was brought
in 1876. 1t was also compromised. He
could not state accurately the points
in litigation, and did not know
where the dispositions could be found.
Questioned as to the contract between
the Central Pacific and the Finance p
Company, witness could not state its
terms, and had never seen the contract.
Witness was questioned concerning the
absorption OF the other road by the
Central Pacific, and repeated the testi-
mony given by the other witnesses.
Commissioner Anderson DO you
see any reason why the Central Pacific
should not be able to liquidate the debt
which it now owes the government?
Cohen-"Yes, sir.
Anderson-"We would like to hear
it."
Cohen-"In the first place, after the
government gave this company aid to
build its road, it afterwards gave
similar aid to other companies,
subsidized other roads that have de-
tracted from the value of the Central
Pacific stock. The company has been
forced by their competitors to reduce
its fare, etc., so that there is little profit
IN running the road; besides the United
States bonds realized the company very
little, not more than 60 per cent of their
face value. The consequence is that
the company now has to pay about II
per cent. for the aid it received. Then
it cost three times as much to bSild
the road than as it would five years
previously or subsequently,. In my
opinion, nobody can take hold of the
Central Pacific and make it pay the
principal and interest it owes to the
government and its mortgages"
Witness declared that by reason of
competing lines, including the Canada
Pacific, the company had lost $50, 0OO,-
900 net revenue in the last five years.
He declared that the Thurman act had
been the most disadvantageous act of
all Congressional legislation to prevent
the payment of the government debt.
Commissioner Pattison reminded the
witness that more dividends had been
declared after the passage OF the Thur
man act than prior to it. He was asked
to explain that fact.
Cohen-"More actual dividends and
larger amounts were declared after than
before, but 1 can't go behind the back
of the directors. They may have issued
those dividends preparatory to selling
more stock. 1t is my opinion that the
company has not made as much money
since the passage of the Thurman act
in 1873"
William b. Mills, general land agent
of the Southern Pacific, said that there
were 500 600 acres of land on the books
of the Central Pacific and $500 on
the California & Oregon. Three
hundred and forty-five thousand had
been sold from the Central Pacific and
275, 900 acres from the California q
Oregon, or about 600 900 acres in all.